Shares in Trade Desk jumped on June-quarter revenue that beat estimates as internet TV drove growth and guidance for TTD stock came in above expectations.
The digital advertising firm reported second quarter earnings after the market close on Tuesday. Trade Desk stock soared 36.2% to close at 74.24 on the stock market today.
"Valuation of TTD stock remains the main investor concern, as most acknowledge that Trade Desk is the dominant independent DSP, with (data privacy) changes by Apple and Google driving more share to the TTD platform," said Oppenheimer analyst Jason Helfstein in a report.
Trade Desk Stock: Internet Cookies
Alphabet's Google has delayed phasing out internet cookies to 2024. After originally delaying the elimination of third-party cookies on the Chrome web browser to 2023, Google says it will delay the phaseout to 2024.
The cookies track consumers on the web. Google will continue to test its targeted ad technology called "Privacy Sandbox." Trade Desk has developed an alternative technology.
Meanwhile, the Department of Justice is preparing to sue Google in September on anti-trust grounds, claiming it unfairly dominates the digital ad market, Bloomberg reported.
In addition, Trade Desk earnings were 20 cents per share, up 11% from a year earlier. Revenue rose 35% to $377 million, said the Ventura, Calif.-based company. A year earlier, Trade Desk earnings were 18 cents a share on sales of $280 million.
TTD stock analysts expected earnings of 20 cents a share on sales of $365 million for the period ended June 30.
"Management noted more leading brands signing major new or expanded long-term agreements with the company noting trends give them confidence that they will gain share in 'any market environment,'" RBC Capital analyst Matthew Swanson said in a note to clients.
TTD Stock: Guidance Tops Views
The company said earnings before interest, taxes, depreciation and amortization, known as EBITDA, came in at $139 million. That was up and ahead of estimates of $123 million.
Strong growth in internet TV ad revenue has been a bright spot for TTD stock. "With (internet) TV becoming more ad-supported and more programmatic, we view TTD stock as the best positioned company to benefit from the shift," said Susquehanna analyst Shyam Patil in a report.
Also, a shopping partnership with retail giant Walmart also is expected to boost 2022 growth.
Trade Desk predicted September-quarter revenue of $385 million at the midpoint of guidance, edging by estimates of $382.2 million. Trade Desk said it expects adjusted EBITDA of $140 million vs. estimates of $134 million.
The company's automated platform enables brands and ad agencies to buy online and mobile ads in real time, rather than in advance manually. In addition, Trade Desk helps clients leverage online data to improve their targeted advertising.
TTD stock had retreated nearly 40% in 2022. In addition, Trade Desk stock holds a Relative Strength Rating of 30 out of a possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
